During the months of November and December the economy relies heavily on consumer spending for the holidays, including three events over the next several days: Black Friday, Small Business Saturday, and Cyber Monday.
Allan Chen, professor of marketing at the University of Kentucky, has some insight on this season’s shopping climate and strategies to help you save.
He says there is a big danger for consumers to overspend, especially with inflation.
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“Consumers who bought a bunch of gifts well before Black Friday may have forgotten about their spending, and happily spend more when they encounter more deals on Black Friday and Cyber Monday,” Chen said. “It would be especially important to track your expenses during these two months, so you don’t have to cut back on necessities in the new year.”
He suggests staying within the budget with a two-step process:
–Set a budget that is as realistic and reasonable as possible.
–Set a lower budget by multiplying your original budget by a percentage (e.g., 80%).
“If you worry you’ll outsmart yourself by gaming the system and setting a higher budget in the first place to off-set the budget cut in the second step, you can even break your budget into mini-budgets for various purchases,” Chen stated.
He notes, “There are real deals on Black Friday and Cyber Monday, and a lot of the comparison-shopping websites can help you vet these. But you want to spend your hard-earned money on things you and your significant others will love and use, not something that will go into the attic/garage the next day.”
The National Retail Federation predicts holiday retail sales will grow by 6-8% this year. E-commerce sales are included in their holiday forecast and are predicted to grow between 10% and 12% in this year’s holiday season.
Chen’s bottom line: “Enjoy the deals but watch your budget. Studies have shown that consumers are more generous when they shop for others. While your family will appreciate your generosity, your new year will be merrier if you can show your love without breaking the bank.”